B-110805, SEP 15, 1952

B-110805, SEP 15, 1952

PRECIS-UNAVAILABLE

THE SECRETARY OF DEFENSE:

THERE HAS BEEN RECEIVED THROUGH THE DEPUTY COMPTROLLER FOR ACCOUNTING POLICY OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE LETTER OF 23 JUNE 1952 WHEREIN IT IS STATED THAT A REVISED SYSTEM FOR NATIONAL SERVICE LIFE INSURANCE ALLOTMENT PAYMENTS MADE BY THE MILITARY DEPARTMENTS TO THE VETERANS ADMINISTRATION, THE DEVELOPMENT OF WHICH WAS PARTICIPATED IN BY REPRESENTATIVES OF THE MILITARY DEPARTMENTS, THE VETERANS ADMINISTRATION AND THE GENERAL ACCOUNTING OFFICE, WAS TO BE PLACED IN EFFECT ON 1 JULY 1952, BUT THAT SEVERAL PROBLEMS MUST BE RESOLVED BEFORE THE SYSTEM COULD OPERATE IN THE MOST EFFICIENT AND ECONOMICAL MANNER.

ONE OF THE MAJOR PROBLEMS CONCERNS THE ELIMINATION OF SO-CALLED REIMBURSEMENT REGISTERS. IT IS STATED THESE REGISTERS ARE PREPARED AND SUBMITTED TO THE VETERANS ADMINISTRATION PURSUANT TO AN AGREEMENT BETWEEN THE ARMY AND VETERANS ADMINISTRATION UNDER WHICH THE ARMY WOULD BE PERMITTED, BEGINNING 1 FEBRUARY 1950, TO APPLY AS SET-OFFS AGAINST CURRENT PREMIUM PAYMENTS DISCONTINUANCES OF ALLOTMENTS WHICH WERE NOT RETROACTIVE FOR A PERIOD OF MORE THAN TWO MONTHS FROM THE MONTH IN WHICH THE DISCONTINUANCE IS RECEIVED IN THE VETERANS ADMINISTRATION. IT IS FURTHER STATED THAT SUCH PROCEDURE HAS NOT BEEN SATISFACTORY IN THAT THE AUDIT ACTION REQUIRED BY THE VETERANS ADMINISTRATION ON THE ITEMS LISTED ON THE REIMBURSEMENT SCHEDULES IN MANY INSTANCES IS NOT COMPLETED UNTIL AFTER THE APPROPRIATIONS FOR THE DEPARTMENT OF THE ARMY HAVE LAPSED.

IT IS NOW DESIRED TO INSTITUTE A PROCEDURE UNDER WHICH THE DEPARTMENT OF THE ARMY MAY ELIMINATE THOSE SPECIAL REIMBURSEMENT REGISTERS AND APPLY CREDITS AS SET-OFFS AGAINST CURRENT PREMIUM PAYMENTS WITHOUT REGARD TO THE DATE OF DISCONTINUANCE OF THE ALLOTMENT.

THE FOLLOWING PLAN HAS THEREFORE BEEN SUBMITTED TO THIS OFFICE FOR CONSIDERATION:

"(A) IT IS PROPOSED THAT THE MILITARY DEPARTMENTS WILL REQUEST ESTABLISHMENT OF A DEPOSIT FUND ACCOUNT TO RECORD SET-OFFS WHICH WOULD OTHERWISE BE PROPERLY CREDITABLE TO APPROPRIATIONS WHICH HAVE LAPSED PENDING CLEARANCE OF THE DISCONTINUANCE BY THE VETERANS ADMINISTRATION.

(B) ALL DISCONTINUANCES, REGARDLESS OF EFFECTIVE DATE, WILL BE RECOVERED BY SET-OFF CREDITS AGAINST THE CURRENT PREMIUMS PAYABLE TO THE VETERANS ADMINISTRATION.

(C) CREDITS WILL BE DISTRIBUTED TO THE APPLICABLE APPROPRIATIONS THAT WERE PREVIOUSLY OVERCHARGED IN ALL CASES WHERE SUCH APPROPRIATIONS ARE STILL ACTIVE, AND TO THE DEPOSIT FUND ACCOUNT IN OTHER CASES.

(D) ALL ADJUSTMENTS TO SET-OFF CREDITS RESULTING FROM FINAL ADJUDICATIONS BY THE VETERANS ADMINISTRATION WHICH RESULT IN REVERSAL OF ALL OR PART OF ANY SET-OFF ACTION WILL BE CHARGED TO THE INDIVIDUAL APPROPRIATIONS PREVIOUSLY CREDITED, OR, IF THEY INVOLVE LAPSED APPROPRIATIONS, TO THE DEPOSIT FUND ACCOUNT.

(E) THE DEPOSIT FUND ACCOUNT WOULD BE ANALYZED PERIODICALLY TO DETERMINE WHETHER AN EXCESSIVELY LARGE BALANCE WAS BEING ACCUMULATED IN RELATIONSHIP TO THE ACTIVITY REFLECTED THEREIN.

(F) SUCH EXCESSES FOUND TO BE AVAILABLE IN THE SPECIAL DEPOSIT ACCOUNT WOULD BE IMMEDIATELY TRANSFERRED TO THE 213590 ACCOUNT, "REPAYMENTS LAPSED APPROPRIATIONS."

(G) ALL OF THE ABOVE ITEMS WILL BE EXPLAINED IN DETAIL ON THE MONTHLY FINANCIAL STATEMENTS."

THE PROPOSED PLAN IS APPROVED FOR THE PURPOSE STATED WITH THE EXCEPTION THAT AMOUNTS SET-OFF IN FAVOR OF THE DEPARTMENT OF THE ARMY WHICH HAVE BEEN TRANSFERRED FROM THE SPECIAL DEPOSIT FUND TO "REPAYMENT OF LAPSED APPROPRIATIONS" BUT SUBSEQUENTLY DETERMINED TO BE EXCESSIVE MAY NOT BE PAID TO THE VETERANS ADMINISTRATION FROM SIMILAR AMOUNTS SUBSEQUENTLY RECEIVED BY THE DEPARTMENT OF THE ARMY BY SET-OFF. SEE IN THIS CONNECTION 17 COMPTROLLER GENERAL 859; 19 ID 696, 700 AND PARAGRAPH 8(B) OF GENERAL REGULATIONS NO. 116 DATED MARCH 17, 1952.